Corporate Japan is a little lost in communication

By Jean-Pierre Lehmann

Eventually, Toyota chose to leave the IMD learning network, because, as one executive bluntly told us: “We do not feel we have anything to learn from the other network corporate members” (which include global companies like Nokia, Nestle, Unilever and Daimler).

That conclusion seems highly questionable. Toyota’s European executives were, to be sure, proud to be part of the company and full of admiration for its products and production methods. But I found that there were also problems of trust and communication. While a number of Europeans nominally held senior positions in Toyota Europe, Toyota Japan invariably appointed Japanese nationals as “shadows” to oversee them. This led at least one of the most senior European executives to leave the company.

Indeed, although Toyota claims to be “global,” its board of directors is exclusively Japanese.

Toyota Europe’s executives felt that making English the working language would contribute to improving trust, communications and efficiency, and also to retaining high-quality staff. But Toyota’s Japanese management rejected that proposal out of hand.

If Toyota and other Japanese companies want to become truly global, their managers must learn to communicate effectively with all their foreign stakeholders. In this global age, the language of business is English. In a recent international test of English proficiency, Japan ranked 136th, well behind South Korea, at 89th, and even North Korea, at 111th. While journalists in South Korea used this survey to demand reforms to improve English instruction in their country’s schools, the same survey hardly received any coverage in Japan.

The language issue goes beyond competition with English-language countries — and even beyond business. English is, for example, the official language of ASEAN — which numbers 600 million people in Japan’s neighborhood.

Toyota’s top managers will find that English is useful not only to explain, and apologize for, the company’s recall of 8 million cars, but also for listening and learning as they try to reverse the erosion of trust among customers. If Toyota’s communication problem can be resolved, there is no reason why Toyota’s fortunes cannot be revived. The same is true of Japan’s economy.

Jean-Pierre Lehmann is professor of International Political Economy and founding director of the Evian Group at IMD Business School.